Dáil Éireann debate -
Thursday, 24 Nov 2016

Vol. 930 No. 2

Topical Issue Debate

Services for People with Disabilities

Deputy Caoimhghín Ó Caoláin

The crisis in the health system and in this instance in the provision of disability services trundles on. It is widely recognised that early intervention is of critical importance when it comes to improving outcomes for children with disabilities but despite the recognition of such a need, the HSE is failing to ensure that young disabled children receive the earliest possible interventions to give them the best start in life. Under the Disability Act 2005, assessments of children's needs must be completed within six months. The recent revelation of the failure by the HSE to process in 2015 as many as 2,500 applications from parents for needs assessments for their children on foot of a disability notwithstanding the legal requirement is a damning indictment of the Government. Exceptional circumstances were cited as the reason for delays in a number of cases. While this is permitted under the regulations, my concern is that the provision is being used to facilitate delayed assessments by the HSE.

Every parent wants the very best for his or her child. In their desperation to have their disabled children assessed, they are now being forced to go private. According to the autism charity Shine, 107 children were assessed privately in 2014 but between 1 January and October 2016, the number of children being diagnosed privately rose to 216. Private diagnosis can cost from €700 to more than €1,000, which is a hefty sum and one which parents should not have to pay to have their children's needs assessed. Equally concerning are the claims by Shine that no follow-up services such as speech and language and occupational therapy have been available since last November to children assessed as having an autism need. I agree with Shine's chief executive, Kieran Kennedy, who says the system has gone beyond crisis. I understand the HSE did not provide a direct answer when asked if follow-up services had been unavailable since last November to children assessed as having that need. It said it was "reconfiguring existing therapy services into geographic based children's disability network teams". Perhaps the Minister of State can confirm if this is the case.

Does the Minister of State agree that reconfiguring existing resources is not going to cut it? What we need are additional resources and we need them now. This is an issue that must be addressed as a matter of urgency in circumstances in which the number of children seeking to be assessed is rising year on year. I want to know what the Government is doing to address this pressing situation. How will it ensure that no child will have to wait longer than six months to be assessed and how will it ensure that follow-up services are available to all of these young people, each of whom deserves proper attention and support?

Minister of State at the Department of Health (Deputy Marcella Corcoran Kennedy)

I am pleased to have the opportunity to update the House on behalf of the Minister of State, Deputy Finian McGrath, who extends his apologies for being unable to attend. I am glad to update Deputy Ó Caoláin on progress in developing services for children with disabilities and the current position on waiting times and needs assessment. I thank the Deputy for raising this important matter, which is one that has been close to his heart for a long time.

The HSE has recognised that early intervention services and services for school-aged children with disabilities need to be improved and organised more effectively and this process is well under way. While there has been continual additional investment in the area, we recognise that the HSE faces significant challenges in respect of meeting the statutory timeframes which apply to the assessment of needs process under the Disability Act 2005 due to the volume of applications, which continues to increase year on year. The HSE is currently engaged in a reconfiguration of existing therapy resources to geographic based teams for children. The objective of the new model of assessment and intervention is to provide one clear referral pathway for all children irrespective of disability, place of residence or school attended. The level of requests for assessment is higher in areas where the reconfiguration of children's disability services has yet to take place, which suggests that where a good service is being provided, the need for assessment is reduced. Some areas have proven particularly challenging in respect of waiting times for assessment and therapeutic service delivery. An example is the Cork-Kerry region where a number of measures have been put in place to deal with waiting lists.

Since 2014, the roll-out of the programme progressing disability services for children and young people has entailed the targeted investment of €14 million and the provision of 275 additional therapy staff to increase services for children with all disabilities. In 2016, €4 million was provided under the HSE's national service plan to focus specifically on speech and language therapy waiting lists in primary care and social care for children aged up to 18 years. This investment represents a long-term increase in speech and language therapy capacity which will be maintained into 2017. A Programme for a Partnership Government commits the Government to improving services and increasing supports for people with disabilities, particular in respect of early assessment and intervention for children with special needs. Significant resources have been invested by the health sector in services for children with disabilities over the last number of years, which is something we all welcome.

Deputy Caoimhghín Ó Caoláin

I thank the Minister of State for taking this matter. I am deeply concerned by the reply I have received. The Minister of State has reaffirmed the very points I made in my opening contribution. She cites the HSE is currently engaged in a reconfiguration of existing therapy resources. She says the objective of the new model of assessment and intervention is to provide one clear referral pathway for all children but it will not do it. As I said earlier, it will not cut it. That is the sad reality because we have an underprovision of the professional skills necessary to cope, not only with the existing year-on-year number presenting but the fact that an increasing number of children are being referred. They are not being referred for no good reason. There is an absolutely valid basis to all of these referrals. It is critical to recognise that resourcing is the essential element in terms of the provision of the necessary professional skills in speech and language therapy, occupational therapy, child psychology et al. While the Minister of State says that since 2014, an additional 275 therapy staff have been appointed, the fact is that a number of them are replacements who filled existing vacancies in circumstances where we are working from a very low base following years of no recruitment. We must ensure that we meet the need that is presenting. It is just not good enough.

As a spokesperson on disability rights among other issues, I was hugely concerned looking at the budget for 2017 that this area had not been properly recognised in the funding provision for the coming year. I appeal to the Minister of State in her particular office to engage with her colleagues and the senior Minister who cannot be left at a remove from responsibility in relation to these matters. I appeal to her in her respective position to reflect on the very serious matter I have highlighted to her. The HSE has recognised, as stated in the Minister of State's reply, that early intervention services and services for school-aged children with disabilities must be improved.

In light of all of my years of service here and in previous life as a public representative, I have to ask when that dawned on the HSE. The process is now well under way but it is just not good enough. I appreciate the help of the Minister of State.

Deputy Marcella Corcoran Kennedy

I can understand the frustration of the Deputy; it mirrors that of many of us. The HSE recognises and is attempting to address the difficulties, not only in specific areas but also across the country, by way of the recruitment of additional staff, the provision of specific service plans for individuals and putting in place additional project managers. I hope that will go some way towards solving the issue. Anybody who is waiting for a day or a week is waiting too long. I will convey the Deputy's genuine concerns in this regard to the Minister of State, Deputy Finian McGrath.

Medicinal Products Supply

Deputy Brendan Griffin

I thank the Leas-Cheann Comhairle for selecting this matter. I have tried to raise it on Topical Issues for three weeks, so I am very grateful to be able to speak.

I want to raise the cases of cystic fibrosis sufferers who hope to be able to avail of the drugs Kalydeco and Orkambi. These are important and groundbreaking drugs for cystic fibrosis sufferers and we need to ensure they are available to them in order to improve their quality of life and change their lives.

I understand that negotiations are ongoing between the HSE and the manufacturer. I want both parties to put the people who are in the middle first and ensure that everything possible will be done to ensure that these vitally important drugs will be made available to those who need them as soon as possible. Every day that goes by without these drugs being available to those who need them most, is a day too long. I have been contacted by many people living in Kerry, including parents and grandparents of children with cystic fibrosis. My colleague, Deputy Neville, whom I know cannot contribute to this debate, has informed me of the number of people in Limerick who are in the same situation.

We know the drugs are expensive and a lot of money is involved, but the results and prize are far too important. We need to pursue this issue. I want to know that everything that can possibly be done on behalf of these people is being done by the Department so that the drugs will be made available to them as soon as possible.

I ask the Minister of State to update us on the negotiations. We would be very grateful. Again, I cannot stress the urgency of the situation enough. It is vitally important.

Deputy Anne Rabbitte

I thank Deputy Griffin for sharing time. Like Deputies Griffin and Neville, many people in Cork have contacted Deputy Moynihan. Deputy Griffin has set the backdrop and I will now read a letter from a dad who wrote to me. He is a representative of the newly formed parents group of Kalydeco. It was established to try to obtain reimbursement for the cystic fibrosis drug Kalydeco for children aged between two and five years. The drug is already reimbursed for children aged over six. The group represents 18 families that have children in the age group which will benefit from Kalydeco. The letter to which I refer states:

As you will be aware the NCPE recently recommended against the reimbursement of the cystic fibrosis drug Kalydeco for 2 to 5 year olds. at the submitted price. As a father of 3 year old with cystic fibrosis and who has the form of cystic fibrosis that Kalydeco treats, I was astonished, disappointed and saddened at the decision of the NCPE. The NCPE decision was made on the 12th of October of this year. To make matters worse, the NCPE took seven months to make the decision. My feelings of disappointment were worsened largely by the fact that the Government is already reimbursing this drug in six year olds and over and has been doing so sometime since early 2013. So why then has this extension not been made available to 2 to 5 year olds? The drug is safe and more effective in children in 2 to 5 years of age in range than in children and adults over 6. The fact that the Government has not reimbursed the drug amounts to age discrimination. It is not reasonable to say that the drug is not good enough in one age group and not in another.

I am speaking on behalf of 18 families, but cystic fibrosis affects people in every county. When 18 families feel they have been totally and utterly sidelined they deserve a response. I look forward to hearing from the Minister of State.

Deputy Marcella Corcoran Kennedy

I thank Deputies Griffin and Rabbitte for raising this issue. The Minister for Health, Deputy Harris, has asked me to extend his apologies for not being available to be here.

I am very aware, as we all are, that access to potentially beneficial drug treatment is an important issue for people with cystic fibrosis and that cystic fibrosis sufferers and their families face enormous day-to-day challenges in dealing with this progressive and debilitating condition. It is important to point out, however, that it is the HSE which has statutory responsibility for decisions on pricing and reimbursement of medicinal products under the community drug scheme, in accordance with the provisions of the Health (Pricing and Supply of Medical Goods) Act 2013, as Deputies are probably aware.

Decisions on which medicines are licensed for use in Ireland and which are reimbursed by taxpayer are made on objective, scientific and economic grounds by the HSE on the advice of the National Centre for Pharmacoeconomics, NCPE. It is a team of clinicians, pharmacists, pharmacologists and statisticians that evaluates the benefits and costs of medical technologies and provides advice to the HSE.

It conducts health technology assessments of pharmaceutical products for the HSE and can make recommendations on reimbursement to assist the HSE in its decision-making process. Since July of this year, a revised and more transparent assessment process for the reimbursement of new medicines by the HSE has been in place. Importantly, this process includes consideration of the budget impact of individual new medicines, the opportunity cost of the treatment and resources available to the HSE. I understand how patients and their families must feel in the circumstances, as they await decisions from the HSE on reimbursement. However, as with all new drugs developed, the HSE must follow a process.

Orkambi is indicated for the treatment of cystic fibrosis in patients aged 12 years and older who have a particular mutation in the CFTR gene. Following a request from the HSE, the NCPE completed a health technology assessment for Orkambi and submitted to the HSE in June 2016. The NCPE determined that the manufacturer failed to demonstrate cost-effectiveness or value for money from using the drug. The NCPE has confirmed that all relevant costs were included in the analysis.

The five-year gross budget impact of reimbursing Orkambi is estimated at more than €390 million and the NCPE noted the significant opportunity costs associated with reimbursing the drug. The biggest barrier to access of such medicines is the price being charged by companies. The HSE has since had further engagements with the manufacturer in an effort to secure significant price reductions for Orkambi. The HSE is considering the outcome of these engagements, together with the NCPE recommendation and other expert advice, in making a final decision on reimbursement. The HSE has advised that the decision will be made on objective, scientific and economic grounds, in line with the 2013 Act.

In regard to Kalydeco, I am informed that, following a request from the HSE, the NCPE carried out an assessment of the manufacturer's economic dossier of ivacaftor, the brand name for which is Kalydeco, for the treatment of cystic fibrosis patients aged two years and older weighing less than 25 kg. In October of this year, the NCPE recommended that Kalydeco should not be reimbursed by the HSE. The five-year gross budget impact of reimbursing Kalydeco is estimated at more than €21 million and the NCPE noted the significant opportunity cost associated with reimbursing the drug.

The HSE will enter into negotiations with the manufacturer in an effort to secure significant price reductions for Kalydeco. The HSE will consider the outcome of these engagements, together with the NCPE recommendation and other expert advice, in making a final decision on reimbursement. As already stated, the HSE has advised that it will make this decision on objective, scientific and economic grounds.

It is appropriate that these should not be political decisions and that a scientific and evidence-based approach is taken in determining the extent to which patients would benefit from treatment with expensive new drugs, the opportunity cost of such decisions on the public service and whether this represents cost-effectiveness for the health service and taxpayer.

It is essential that the HSE has everyone's support in getting the best results for patients.

Deputy Brendan Griffin

For the record of the House, I wish to pay tribute to Marisa Reidy, a campaigner in County Kerry who has gone public about her situation in terms of Orkambi and her daughter. I pay tribute to her bravery and her persistence in pursuing what everyone feels needs to be done.

On Kalydeco, I wish to read a particular item of correspondence I received from another Kerry family:

A few days short of our daughter's 4th birthday, when she was due to start Kalydeco, we were given the news that she would not be offered the drug on the grounds of "cost effectiveness". This was the cause of much heartbreak and many tears in our household. We want to know why Kalydeco cannot be given to 2-5 year olds at the same agreed price as 6 years and over.

We know a price for Kalydeco in the over 6 category had been agreed by Vertex and the HSE in 2013. We also know that it only rightly took the bones of a week to agree said price. We would hope and pray that it would be found in the hearts of all involved to resolve this very serious matter as quickly as you did in 2013.

Surely the quality of our children's lives deserve the same urgency as the original decision in 2013.

Our daughter's diagnosis was the most heartbreaking day of our lives and one that will never be forgotten. But the beautiful staff of The Butterfly Unit in University Hospital Limerick helped us cope and taught us to have our cry, get it out of the way and promised us only positivity after that.

We have lived successfully under this very wise philosophy for 4 years until we had our hearts and the hearts of every doctor, consultant, nurse, parent and sufferer of cystic fibrosis broken by this mind blowing decision.

We had a carrot dangled in front of us, the closest thing to a cure there is for our beautiful child and with no warning it's snatched away from us and so has remained gone.

Is there anything you can do to help us in our quest to get this drug made available to our daughter?

I think that says it all.

An Leas-Cheann Comhairle

I have given the Deputy an extra minute.

Deputy Brendan Griffin

I thank the Leas-Cheann Comhairle. This is urgent. I note from the Minister of State's reply that the HSE will enter into negotiations in respect of Kalydeco. It needs to happen today. It needs to happen now.

An Leas-Cheann Comhairle

I call Deputy Anne Rabbite. The Deputy cannot deprive other Members.

Deputy Brendan Griffin

There is an urgency here and this needs to be accelerated rapidly.

An Leas-Cheann Comhairle

I know how heart-rending it is, which is why I gave the Deputy extra time. I call Deputy Anne Rabbitte.

Deputy Anne Rabbitte

Deputy Griffin need not worry. I will carry on from where he left off. What we are asking is how can we put a price on a child's life. How will we get the HSE to engage? What is the timeframe? Those are the questions. What gives us, as a political establishment, the right to put a price on a child's life? I know we have to mind the purse strings of Government and everything else in the national interest but at the end of the day we are speaking about parents, their children and their lives.

The other issue I would like to pick up on is that this depends on the weight of a child. The limit is 25 kg. The price and the weight matter. In light of what Deputy Griffin has stated, and given the HSE could make the decision for those six years old and over, the HSE needs to go back and review the situation and engage on the issue. If we can do it for six-year olds, we can do it for those who are younger.

Deputy Marcella Corcoran Kennedy

Based on the information received from the HSE, it has advised that it is considering the outcome of the negotiations with the manufacturer of Orkambi and is entering into negotiations on Kalydeco. Having heard the Deputies' contributions, I will convey the urgency of those negotiations. No one could argue with the sentiments of those affected such as the family referred to by Deputy Griffin and Marisa Reidy and her daughter. I will convey that to the HSE.

Mortgage Lending

Deputy Mick Wallace

First off, when the 20% rule was brought in a while back, some people criticised it, but I did not. I thought it was a good idea, as it would help avoid the pitfalls that so many people fall into when it comes to property. They spend too much to keep a roof over their heads. Of course, it did mean that it would be harder for a lot of people to get onto the property ladder.

The alternative was for the State to provide affordable housing, but this has not happened. The measures introduced by the State to deal with the housing crisis are not dealing with it. It has been a bonanza for investment funds and vulture funds. Our landlords are getting bigger in the sense of the number of units they can hold. There is still nothing in the world to stop developers from sitting on valuable land, watching the price of it go up. We have been talking about addressing that issue for the past five or six years, but it is still not addressed. There are huge problems with everything we are doing in terms of the provision of housing.

The Government introduced a help-to-buy scheme, which drove up prices. This measure will drive them up as well. We are talking about letting NAMA build 20,000 houses that will cost approximately €330,000 each. Why does the Government not empower local authorities to build houses on the State-owned land NAMA is working on instead? They could build affordable and social houses on these sites so that people could buy them at an affordable price. This new rule of the Central Bank's will only drive up prices as well.

Deputy Bríd Smith

The change in the first-time buyer's rebate had one aim and one aim only, namely, to drive up the price of property and homes. The entire Government policy to deal with the housing crisis has been about increasing prices. The perverse logic is that only the market can supply houses and, if it is not supplying them, we must ensure we make it worth their while to do so. We give tax breaks to developers and landlords and reduce housing and apartment standards. We give developers funds for infrastructure and public lands and cut the level of social housing in every private development required under Part V. We spend billions funding landlords to house people in private property through rent supplement, the housing assistance payment and the rental accommodation scheme and instruct NAMA to sell apartments and houses at knock-down prices to corporate landlords and vulture funds.

As each of these measures fails, the crisis worsens and the number of children and families that are homeless and in emergency accommodation increases. Rents rise beyond the capacity of ordinary working people and more and more people are turning up in the Circuit Court for repossession of their homes. Every new set of figures shows the abject failure of this Government to deal with the housing crisis. The Government's only response is to wonder how it can get the market working and increase house prices so that it is more profitable for its buddies in the building, property and landlord sectors to get out of bed and actually build houses.

I put it to the Minister of State that this move will do nothing to alleviate the housing crisis but will, in fact, bring us back to where we were eight or ten years ago.

Minister of State at the Department of Agriculture, Food and the Marine (Deputy Andrew Doyle)

As the House is aware, yesterday the Central Bank announced amendments to the macro-prudential regulations for residential mortgage lending. These changes will take effect from the start of next year. The Central Bank has an independent mandate to protect the stability of the Irish financial system and it first introduced the macro-prudential lending regulations in February 2015.

These regulations were the first such controls on lending in Ireland and they applied proportionate loan-to-value, LTV, and loan-to-income, LTI, limits to mortgage lending by regulated financial service providers in the Irish market. Under these regulations a borrower was subject to a general maximum loan-to-value limit of 80% of the value of a primary home property. However, the regulations also allowed for a higher 90% threshold for first-time buyers in respect of the value of a property up to an amount of €220,000 and for an 80% threshold for any value in excess of that amount. The rules also applied an LTI restriction of 3.5 times annual income. The regulations did allow a certain flexibility to banks to exceed both the LTV and LTI thresholds by up to 15% and 20% respectively in regards to each individual bank's overall primary home mortgage lending in any year.

When they were introduced, the Central Bank made clear that these controls on mortgage lending were designed to be a permanent feature of the Irish financial system. However, the Bank also committed itself to keeping the particular measures under review to ensure they are appropriately calibrated to evolving financial and economic circumstances.

For this reason, the Central Bank began its first review of the regulations earlier this year. As part of that process, the bank initiated a call for evidence based submissions. In total, it received approximately 50 external submissions as part of the review process. Yesterday, the Central Bank announced the results of this review process and confirmed that some small adjustments would be made to the regulations.

The key changes will mainly apply to first-time buyers, for whom the LTV limit of 90% will now apply to the entire value of a property rather than the first €220,000 of a mortgage loan as is currently the case. Also, the flexibility to banks to lend above the LTV limits is being adjusted. Mortgage lenders will now be able to lend up to 5% of their overall lending to first-time buyers at above the 90% LTV limit; in respect of second subsequent buyers, lenders can allow 20% of their overall mortgage loan book to exceed the 80% LTV restriction that applies to such lenders. Currently, the overall limit is 15%.

There are two other changes to the regulations, namely, the removal of large commercial borrowers from the scope of the regulations and allowing property valuations to be carried out up to four months before a loan is provided. Valuations were required to be carried out within two months of a loan being provided and this had caused some problems at the closing of some sales. More flexibility is now available at the key point in a sales transaction. Nevertheless, it should be noted that no change has been made to the LTI restrictions of 3.5 times the annual income or to the exemption allowance of 20% of a lender's overall mortgage loan book.

This macro-prudential regulatory framework is designed to avoid spiral dynamics between house prices and credit volumes. This system should allow for consumers to purchase their own homes while protecting against any significant surge in property prices and preventing imprudent lending on the part of the banks. The Central Bank indicated that since the mortgage measures were initially flagged in late 2014, there has been a sharp moderation in expectations for annual gains in house prices. This is because it is widely understood that persistently high rates of increase in house prices are not likely in a system in which measures place ceilings on LTI and LTV lending ratios. Moreover, the Central Bank has indicated that the regulations will be kept under constant review and can be tightened if there is emerging evidence of elevated risks in the mortgage market.

As indicated, these refinements of the macro-prudential regulations will take effect from January 2017. From the Government's point of view, they are a prudent but welcome development that will make it a little easier for people to secure a mortgage. In particular, when taken in conjunction with the help-to-buy scheme, they should assist first-time buyers who are struggling to save the deposits required to purchase homes.

Deputy Mick Wallace

It will continue to be the case that no control will be exercised over property prices or rent levels. The measures are clearly designed to increase demand and will create price inflation. Was one of the factors involved in this decision the beneficial effect these measures would have on property portfolios held by investment funds, vulture funds, real estate investment trusts, REITs, and banks? First-time buyers will be bidding against investors for new builds. The latter can afford to see prices rise, particularly in view of the fact that Ireland has the most attractive residential investment yield in Europe.

What will trigger a review of the effects of the new mortgage lending criteria and how will those effects be monitored? An annual review is planned by the Central Bank. How will the success or failure of the new criteria be measured? This morning, Sharon Donnery of the Central Bank stated that the majority of first-time applicants for loans had in excess of the previous minimum deposit of 20%. If that is the case, what is the rationale for making the proposed changes to mortgage deposit criteria? What statistics and trends underpin the proposed changes? Why has the Central Bank suddenly changed its view that a 20% deposit was the right idea? From where is the pressure is coming? It is certainly not coming from young people because they are not able to exert such pressure. The State must build affordable housing if young people are to purchase houses. This gimmick of a scheme will only drive up prices.

Deputy Bríd Smith

The Minister for Finance, Deputy Noonan, welcomed the changes proposed by the Central Bank and indicated they will make it easier for first-time buyers to obtain a loan that will suit their needs. Some people may be able to borrow enough to get a roof over their heads but it will be at a price set by developers and one at which they believe it will yield a decent profit margin. Various sources suggest the profit margin in the current market stands at roughly €30,000 per housing unit. Success will be measured by developers being able to get out of bed for a profit of €30,000 for each unit they build and a few ordinary people being able to borrow enough to put themselves in debt for more than 30 years, with their mortgage repayments consuming 40% or 50% of their total income. This will not and cannot work and will do nothing to alleviate the crisis.

Local authorities must invest in public housing to provide permanent social housing and end the crisis that has seen thousands of people evicted, placed in emergency accommodation or languishing in private rental properties paying inflated rents. The Government has failed to deal with the crisis and until it grasps the nettle, all it is doing is pushing up profits for landlords, developers, REITs and vulture funds.

Deputy Andrew Doyle

The LTI limit of 3.5 times income has not been changed. When I tried to get a mortgage 30 years ago banks applied prudent lending rules for mortgages to purchase or build a home. The LTI limit at that time was set at 2.5 times the income of the private earner in addition to 1.5 times the secondary income. Rule-of-thumb measures have traditionally been applied to mortgage lending. During the bubble, however, no rules applied and lending institutions, which have since left the Irish market, engaged in aggressive advertising to encourage people to remortgage their homes or set up current accounts on their mortgage in which they retained a certain amount. Weekend events were also held in hotels in provincial towns to highlight the value of investment properties abroad and encourage people to remortgage their homes.

The reason the Central Bank introduced new rules on mortgage lending was to control lending to first-time buyers and give them a small advantage over buyers of second and subsequent houses. Under these rules, first-time buyers could secure mortgages of 90% of the sale value for houses priced at up to €220,000. Different criteria applied for higher price houses. All the submissions received by the Central Bank have been published on its website. The submission from the Department of Finance proposed that the 90% threshold be applied to the first €320,000 cost of a home, in other words, it proposed to increase the current figure by €100,000. The Central Bank, in its wisdom, decided to remove the limit.

These changes are not aimed at increasing profits for developers or anyone else but to encourage house building. Even if we build so-called affordable houses, the basic economic fact remains that supply must meet demand if we are to get stability in the market. A graph of house-building figures for previous decades would show a spike as the rate of house building increased rapidly followed by a trough as it fell almost twice as quickly. We need to bring stability into the market and offer certainty for buyers.

Farm Household Incomes

Deputy Michael Collins

I acknowledge Deputy Margaret Murphy O'Mahony's input on this issue. I had intended to share time with the Deputy but she had another commitment this evening and was unable to come to the House.

Grain farmers are going through one of the most difficult periods experienced on family farms in many decades and farm incomes are at an all-time low. I have spoken at length with some members of the farming organisations and grain farmers in west Cork in recent weeks.

I have visited many grain farmers from Kinsale to Skibbereen and seen at first hand the crisis. Grain farmers across the country have lost much of their crops and many face ruination. Many grain farmers in County Cork, particularly along the coast, are in severe difficulties as a result of the recent weather conditions which were unsuitable for grain harvesting. This has been the most difficult harvest in the past 30 years. Instead, the grain harvest this year turned out to be a salvage operation. The bad weather, coupled with the low prices of grain in the world market and high input costs such as the cost of fertilisers and sprays, means the situation has reached crisis point. Many grain farmers have lost between €200 and €250 per acre this year.

Many growers of winter grain along the south coast lost their crops due to bad winter weather. They then replanted their crops with spring grain crops which led to extra expense. Many of these crops were then damaged by the bad autumn weather, compounding the problem for many grain growers in the south. Many of them are left with large bills to pay to co-ops and other merchants. This is a serious emergency for the sector and it is clear compensation should be made available immediately to rescue the industry.

This year is the fourth year in a row in which many grain farmers find themselves trading at a loss. Over the past four years, the amount of land in cereal production dropped by 100,000 acres. It is predicted to fall by a further 67,000 acres in 2017. The whole farming sector is suffering from low prices. The Government must stick up for it and support our farmers. Without support, farmers will not survive. The IFA, Irish Farmers Association, and the ICSA, the Irish Cattle and Sheep Farmers Association, have already made a case to Europe on this issue but they need strong support from the Minister for Agriculture, Food and the Marine. French farmers experienced similar problems this year and their Government has sought compensation from the EU. Did the Irish Government support this call by the French Government?

Without a compensation package being made available to grain farmers, many of them will not survive. The sector is in real crisis. Will the Minister do everything in his power to support grain farmers in this difficult time? He would not be setting a precedent if he did, as in the recent past dairy farmers have been rightly compensated in a time of difficulty while forestry owners have been given replanting grants. Many grain farmers have told me that, due to the bad weather, their yield was as low as 0.8 of a tonne to the acre. Normally, they would have three tonnes to the acre. It is clear this year's harvest was simply a salvage operation, leaving them with huge losses.

Deputy Andrew Doyle

I am pleased to have this opportunity to address the House on this important issue. I fully acknowledge and accept there are ongoing difficulties being experienced by the farming community, not least by our tillage farmers. The Minister for Agriculture, Food and the Marine, Deputy Michael Creed, is aware of the specific difficulties in County Cork and other coastal locations that some tillage farmers experienced this year at harvest as a result of sea mist.

This sector is an important area in the agricultural economy but it has been a challenging year both in terms of market returns and variable weather conditions experienced during the harvest. The Minister recently chaired a meeting with the main stakeholders in the tillage sector. At the time, the Minister said this meeting provided a platform for the stakeholders to express their views and concerns on the challenges they are facing but, equally, to discuss the opportunities that lie ahead for the industry. At that meeting the Minister outlined that one of his chief priorities was to provide low-cost and more flexible finance.

In this regard, he was happy to announce on budget day plans for a €150 million agri-cash flow loan support scheme. This financial instrument has been developed in conjunction with the Strategic Banking Corporation of Ireland by leveraging EU and Exchequer funding totalling €25 million from the Department to deliver a total loan fund of €150 million. This will support highly flexible loans for up to six years for amounts up to €150,000. The interest rate applying is 2.95% and the product will be available to livestock, tillage and horticulture farmers. Loans to tillage and horticulture farmers will be provided in line with the EU's agriculture state aid de minimis requirements.

This is a cash flow support facility to improve the working capital position of farmers and other viable primary agriculture small and medium-sized enterprises, SMEs. The loans are primarily to pay down expensive forms of credit such as merchant credit and other short-term financing facilities such as overdrafts. Last week. The Minister welcomed the Strategic Banking Corporation of Ireland open call for financial intermediaries to deliver the scheme, which will be operational as early as possible in 2017.

The loan scheme is part of a three pillar strategy in response to income volatility that was announced in the recent budget, along with additional tax measures and farm payments. Among the tax measures agreed with the Minister for Finance was an adjustment to the current income averaging system, which will allow for an opt-out in an exceptional year. This will be available immediately for this year's tax liability and will go some way towards addressing current cash flow concerns.

As an additional support to cash flow on farms, including tillage farms, advance payments would be made this year in respect of the basic payment and greening payment schemes. Advance payments commenced on 17 October last, the earliest possible date by which payments can begin under the governing EU regulations. Up to last week, €786 million has been paid out to 119,904 farmers and payments are ongoing.

I am also pleased to note the processing of the areas of natural constraints payment scheme is on schedule and payments have already commenced during the third week in September. It is expected approximately 96,500 will fulfil the scheme eligibility requirements. The Department will also be opening a targeted agricultural modernisation scheme specifically for the tillage sector.

The Minister also stressed at the recent tillage stakeholders meeting that, in this changing landscape, we need to take a fresh look at our tillage industry to ensure that it is best positioned to withstand possible future threats and to avail of the new opportunities which may present themselves.

Deputy Michael Collins

I thank the Minister of State for his reply. The problem is that these farmers need immediate financial compensation. They are facing ruination. I have met them and the Minister of State probably has too in his constituency. Loan support at this time is not what they are looking for, as it will only create a further problem down the road for them. Tax breaks are not a solution to this crisis either. The solution is what the French Government looked for. Did the Irish Government support the French Government's calls for compensation in this area?

Why does the Government not see the serious struggle grain farmers are going through? It has been over four years, not just this year alone. These farmers are facing ruination and are in a desperate position in which they do not want to be. They are working men and women who want to work on their farms but are forced into seeking compensation. Will the Minister go cap in hand to Europe to plead on their behalf and get the compensation they need? Farmers across west Cork are in serious difficulty. I met a farmer recently who tried to get his machinery on to his land for the harvest three times but could not each time. It is a serious situation for which loan support or tax reliefs will not work. These farmers need immediate financial compensation. Will the Minister join with the French in working towards that?

Deputy Andrew Doyle

On the claim the French Government sought support at the Council of Ministers, while I was not at the recent meeting, I am given to understand that was not the case. There is no appetite in Europe for claims for emergency compensation. At best, the French call was lukewarm.

Tillage in parts of the country has suffered as badly as it did in 1985 and 1986, the last two bad years when it hit all the country. I have 15 acres of grain myself. The harvest was delayed because of weather and the birds did a lot of damage. We did manage to salvage a reasonable crop, however.

The east coast was not as badly affected as the south and west coasts.

There are two big problems with the grain sector, one of which has been masked in recent years by high yield. The first is global prices. These are invariably cyclical but they have been cyclically down for four consecutive years. This year, the problem was compounded by yield. The second issue in the Irish context is the fact that 50% of all crops in the arable sector are on rented or leased land. This is not the best way. The current conacre system is a disaster for farmers. It drives up prices with competition. We do not have any long-term security. Farmers say that every year they have to give a certain price, which is probably the value plus X. If, however, they were in a position to engage in long-term leasing, it would help. The agri-taxation measures taken a couple of years ago were to try to incentivise longer-term leasing to give a certain level of security. Partnerships can be arranged between farmers and landowners such that there is risk-sharing.

The low interest, flexible money is because tillage farmers in particular find the position on working capital and merchant credit really difficult. If they owe a certain pot of money to a merchant on a bank overdraft, it will still remain. If they can get low-interest money, with a six-year loan and an interest-only option for the first few years, they can clear it. If we adopt the principle that the cycle will actually improve, there is a chance that farmers can trade out of this, with the help of other supports. It is very difficult to secure specific funding just for a sector in Europe.